New Stock News | Ruichang International Plans to Launch IPO in Hong Kong. The China Securities Regulatory Commission (CSRC) requires clarification on matters such as equity transfer and fundraising projects.

On November 17th, the China Securities Regulatory Commission (CSRC) announced the disclosure of supplementary materials required for overseas issuance and listing (from November 10th to November 16th, 2023). The disclosure includes requirements for Rui Chang International to provide supplementary explanations regarding equity transfers, fundraising projects, the rationality of pre-listing cash dividends, and compliance with internal decision-making procedures. According to the Hong Kong Stock Exchange's disclosure on September 28th, Rui Chang International Holdings Limited (Rui Chang International) has submitted an application for listing on the Main Board of the Hong Kong Stock Exchange, with FIRST SHANGHAI as its exclusive sponsor. I. Regarding equity transfers, please provide explanations on: (1) the pricing basis and fairness of Li Hua's transfer of the issuer's shares in July 2023, as well as the tax payment status; (2) the pricing basis and fairness, as well as the tax payment status, of Refine Development's capital increase and acquisition of Filimon International's shares; (3) the reasons for Filimon International's transfer of equity in Rui Chang Petrochemical to Felice Stone, as well as the payment and tax payment status of the related equity transfer proceeds; (4) the pricing basis and fairness, as well as the tax payment status, of Lu Bo's transfer of Shanghai Rachel shares to Hong Kong Deqing in January 2021; (5) the pricing basis and fairness, as well as the tax payment status, of Shanghai Ruisheng's acquisition of Shanghai Rachel shares, and an explanation of Shanghai Ruisheng's compliance with foreign exchange management procedures. II. Regarding operating norms, please provide explanations on: (1) whether the business scope of the company's domestic operating entities complies with the Negative List for Market Access (2022 edition), and provide clear basis; (2) the reasons and compliance of Shanghai Rachel's incomplete registered capital, and its impact on the company's ongoing operation and debt repayment capabilities; (3) the rationality of pre-listing cash dividends and the compliance of internal decision-making procedures, whether there is a significant impact on the company's debt repayment capabilities and ongoing operation, as well as the necessity and rationality of implementing the issuance and listing financing under a situation of large-scale cash dividends; (4) the situation of qualifications and licenses held by all domestic operating entities of the company; (5) the reasons and compliance of inconsistency between the actual business operations of Shanghai Ruisheng and its registered business scope. III. Please provide explanations on the regulatory procedures fulfilled for new production facility projects funded by the IPO. According to the prospectus, Rui Chang International originated in 1994 and is headquartered in Henan Province, China. Its main business is the manufacture of petroleum refining and petrochemical equipment. Its products are divided into four categories: sulfur recovery equipment and volatile organic compound incineration equipment; catalytic cracking equipment; process burners and heat exchangers, and related components. The company mainly supplies its products to downstream customers in China and also provides comprehensive services including electrical and mechanical installation. According to a report by Frost Sullivan, the petroleum refining and petrochemical equipment industry in China is a fragmented industry, with each product category accounting for only a small portion of the industry. Based on total revenue in 2022, Rui Chang International's market share in China's petroleum refining and petrochemical equipment industry reached 0.06%. The company is the third-largest manufacturer of catalytic cracking equipment and the second-largest manufacturer of sulfur recovery equipment and volatile organic compound incineration equipment, with market shares of 6.3% and 3.1%, respectively. Over the years, Rui Chang International has established cooperative relationships with many participants in the Chinese oil and petrochemical industry, including facility owners, third-party contractors, and manufacturers. The company has maintained stable business relationships with subsidiaries, branches, and a large EPC contractor of two major Chinese petroleum refining and petrochemical groups for 28 years.